09 Feb 2024
India's Rupee edged down on Friday, facing pressure from Dollar demand by importers.
The Indian currency closed at 83.0350 against the greenback, a 0.1% decline compared to the previous session's close of 82.9550, Reuters news agency reports.
The Rupee also recorded a weekly decline of 0.1%.
The Dollar index, measuring the currency against six major peers, was predominantly steady near 104.2, whilst the majority of Asian currencies were rangebound but ended the week lower, facing pressure by moderating bets on early Fed rate cuts.
The chance of the US central bank slashing rates in March have fallen under 20%, whilst those for May have also edged down to around 60%, a fall from approximately 73% last week, as per the CME's FedWatch tool.
Increasing oil prices also impacted on India's Rupee on Friday, as Brent crude oil futures increased to a high of $81.84 after rising 3% on Thursday following fears of an escalating conflict in the Middle East.
However, despite the pressure, sales of Dollars by foreign banks helped to stem the Rupee's decline throughout the week, according to a foreign exchange trader at a state-run bank.
Indeed, the trader forecasts the Rupee to trade between 82.80 and 83.20 over the next week, the Reuters report goes on to add.
Investors will be focused on inflation data in India and the US next week, with the latter more likely to act as a more significant prompt for the Rupee.
Core consumer price inflation in the US is forecast to have remained steady month-on-month in January at 0.3%, according to economists surveyed by Reuters.
On the whole, price action on the Rupee "remains lacklustre", and while US inflation data could trigger moves in the Dollar index, India's currency may not move too far from its current range, stated the head of forex and rates at Nuvama Professional Clients Group, Abhilash Koikkara.